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Macroeconomic Policy and Financing for Development Division +66 2 288-1234 escap-mpdd@un.org

This study provides a broad overview of the access to finance by micro, small and medium-sized enterprises (MSMEs) in Nepal based on extensive interviews with entrepreneurs, financial institutions, and government officials. The study finds that micro- and small enterprises have the most serious difficulties to access credit, as the typical loans of microfinance institutions are too small, while the minimum amounts of loans offered by commercial banks are too large for their needs. To address this “missing middle problem”, the study proposes a rich set of policy options, ranging from a mandated minimum allocation of banks’ loan portfolios to SMEs, to expanding the scope of the Micro Enterprise Development for Poverty Alleviation (MEDPA) program to cover SMEs as well as micro-enterprises, and expanding financial and business literacy programs for MSME entrepreneurs.

Contact
Macroeconomic Policy and Financing for Development Division +66 2 288-1234 escap-mpdd@un.org